Embodiments of the present invention relate generally to inventory management and more particularly to allocation inventory levels throughout a supply chain.
In recent years, ever more attention has been paid to efficient allocation of items in supply management systems. Such systems, which can include warehouse management systems, supply chain management systems, inventory management systems, enterprise resource planning systems, and the like, all are dedicated to allowing organizations to more efficiently allocate scarce resources among competing purposes. Merely by way of example, modern warehouse management systems (“WMS”) often are complex software packages that run on top of a relational database management system (“RDBMS”), such as the Oracle 10g RDBMS. Oracle Warehouse Management is one example of such a package.
Companies usually have limited funds to invest in inventory. Inventory planners often have to determine inventory levels in their supply chains subject to constraints on the budget that is available for deployment. Therefore, one goal of an inventory management application is to efficiently allocate items within these budget and/or other constraints. The challenge is to determine inventory levels that respect budget constraints, maximize expected profits, meet targeted customer service level requirements as far as the budget allows, model practical constraints such as contractual obligations to retailers involving limits on inventory levels, warehousing space constraints etc.
Existing solutions apportion the budget a priori among various item classes based on business objectives and historical data or rely on locally optimal heuristics involving prioritization of items and do not explicitly consider target service levels in arriving at the solution. Local optimization heuristics suffer from the drawback of not taking advantage of the supply chain structure to optimally deploy inventory throughout the chain to get high service levels at low costs.
Hence, there is a need in the art for more robust methods and systems for allocating items.